Capital A CEO Tan Sri Tony Fernandes
PETALING JAYA: Capital A Bhd
posted a net profit of RM1.64bil for the third quarter ended Sept 30, 2024 (3Q24), swinging into the black from a net loss of RM102.75mil in 3Q23.
Capital A Bhd comprises Aviation Group and Capital A Companies which are Asia Digital Engineering (ADE), Capital A Aviation Services (CAPAS), Teleport, MOVE Digital and Capital A International.
In a statement, the group said its improved profitability in 3Q24 was mainly due to the foreign exchange gain of RM2.3bil from the appreciation of local currencies against the US dollar during the quarter.
Capital A also saw a 17% year-on-year (y-o-y) increase in its revenue to RM4.9bil in 3Q24, mainly attributed to the recovery in demand from both domestic and international travel.
For its airline business, Capital A said the company delivered strong results in 3Q24 despite it being a seasonally slow quarter.
Revenue increased 15% y-o-y to RM4.5bil, while earnings before interest, taxes, depreciation, and amortisation (Ebitda) surged 50% y-o-y to RM577mil.
This was driven by strong travel demand, favourable fuel prices and strengthening of the ringgit against the US$.
Capital A also said that the company managed to deliver the positive performance despite still having non-active aircraft.
About 23% of the fleet (170 operating aircraft as at the end of quarter) was not in operation during the quarter.
The total fleet grew to 221 aircraft in 3Q24, with 181 aircraft available for operations including spares. Once all aircraft are reactivated, this will bring the total active fleet to 205 aircraft by the end of 2024.
Meanwhile, the group noted that cost per available seat kilometre excluding fuel (CASK ex-fuel) rose slightly by 3%, primarily driven by user charges and other operating expenses associated with increased flight activities.
Moreover, while 10% lower fuel price per barrel and reduced maintenance costs contributed to cost savings, overall CASK declined by 1% y-o-y. Capital A said excluding non-flying aircraft costs, operational CASK and CASK ex-fuel would be lower by 4% and 2%, respectively.
Aviation Group chief executive Bo Lingam remains optimistic about the upcoming 4Q, which traditionally is a strong period for the aviation industry.
“We expect to maintain high load factors exceeding 85% and robust average fares, driven by year-end festivities. To accelerate this momentum, we will expand our fleet by adding five new A321neo aircraft to our Malaysian and Thai operations, bringing our total active fleet to 205 aircraft.
“We will also launch 18 new routes, both domestically and internationally, to cater to the growing demand from key markets like China and India. In 2025, while we are returning back two aircraft to our lessors, we are also anticipating to add 11 new aircraft into our fleet bringing the total fleet count to 233 aircraft,” he said.
On the other hand, Capital A’s non-aviation companies generated over RM771mil in pre-elimination revenue for the quarter, up 19% y-o-y.
Notably, Teleport and ADE were the key revenue contributors, accounting for 35% and 25% respectively. The recorded EBITDA was RM90mil, or 12% margin, which resulted in a quarterly net operating profit of over RM61mil.
Looking ahead, Capital A chief executive officer Tan Sri Tony Fernandes said ADE will capture growing maintenance, repair and overhaul demand through the expanded hangar capacity, while Santan's entry into the third-party airline catering market will further boost the group’s revenue.
“Separately, Teleport's robust performance, driven by increased volume and operational efficiencies, is expected to continue.
Commenting on the group’s exit plan from the PN17 status, Fernandes said the company is on track to complete this transaction by January 2025, having secured the shareholder approval for the disposal of its aviation business.
“Concurrently, we are actively working on submitting and securing approval for our regularisation plan, which is now simplified,” he said.
